The Bank’s published OCR track implies the cash rate will rise by a total of 125 basis points, to 3.75%, by year end. A further 75 basis points of hikes is anticipated through calendar 2015 and then another 50 in 2016. This leaves the cash rate no lower than 5% by the end of the Bank’s forecast horizon (March 2017). Importantly, one can’t tell if this is the expected peak in the cycle as the rate track is still on a rising trend at the end of the forecast horizon.
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